The Three Hidden Blind Spots That Will Crash The Electric Car

electric car charging

Photo: Alan Trotter | Flickr

Governments and corporations are allocating billions of dollars to make the electric car an attractive mass-market proposition. Their efforts so far have been directed at on individual pieces of the puzzle. Unless they expand their view to encompass the entire ecosystem, however, their efforts are sure to fail.So far, the debate over the inevitability of the success vs. failure of electric cars in the mass market has focused on three main problems.

Problem 1: Too expensive when compared to gas powered alternatives. The $35,000 all-electric Nissan Leaf is roughly comparable to the $15,000 Nissan Versa. Yes – electric cars are far cheaper to drive (it can cost less that $0.03 to drive an electric mile, compared to $0.16 for a gas mile). But even with the $7,500 federal tax incentive, that’s a $12,500 difference.  And $12,500 buys a lot of gas.

Problem 2:  Limited driving range.  The Leaf’s battery – estimated to cost more than $10,000 battery – will take you 100 miles before it’s drained.  Less if you use the air conditioner or drive on hilly terrain. 

Problem 3: Charging infrastructure. Not only are public charge stations few and far between, charge times (at home or away) are measured in hours, so forget mid-trip fill ups.  E-cars as offered are strictly for short commutes.

The good news is that each of these problems is being addressed through a combination of public and private incentives and investments.  Battery technology is improving every year, offering cheaper batteries that can offer greater range, and charge spots are being installed in many cities.

The bad news is that solving these problems won’t bring mass market success to the electric car.  Three critical blind spots are being neglected:

Blind spot 1: Used E-car buyers.  The very improvements that will make future electric cars more attractive will make purchasing used e-cars less attractive, undermining their resale value.  By 2016, a new model Leaf could have a battery that is 20% cheaper and drives 20% farther than a 2012 model.  The seller of a used 2012 will see depreciation of a sort that the used car market hasn’t seen in generations (but one that is well known to the used computer market).

Blind spot 2: Limited savings. The common rejoinder to the limited driving range critique is that most drives are short, and that the current generation of e-cars makes perfect sense for short urban commutes.  But this contradicts the economic justification for the high purchase price of the e-car – that the savings come with every mile driven.  You’ll need to drive a lot of miles to break even, and if the e-car is positioned as a short distance car, the economic argument, which is key to winning in the mass market, breaks down.

Blind spot 3: Electricity grid capacity. The electric car faces a problem of scalability.  As long as only a handful of drivers plug-in each morning, the current grid will hold.  But if a significant number of drivers all plug-in on a hot summer’s day when capacity is already strained, expect major problems in both power generation and distribution.  And expect them to last as long as the installation of charge spots remains decoupled from the deployment of smart grid solutions.

It took 10 years for companies and governments to recover from the last e-car crash, whose poster child was GM’s failed EV1.  Any true advocate for electric cars needs to assure that the ecosystem being deployed in their service addresses all six of these issues. Anything less will lead to stranded effort, wasted investment, and another lost decade before a next attempt.

Check out Ron Adner’s book The Wide Lens >

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